| Summary of significant accounting policies |
Note
3 – Summary of significant accounting policies
Basis
of presentation
Management’s
opinion is that the accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations
of the Securities and Exchange Commission (“SEC”) and include all normal and recurring adjustments that management of the
Company considers necessary for a fair presentation of its financial position and operation results. The results of operations for the
six months ended June 30, 2024 are not necessarily indicative of results to be expected for the full year of 2024. Accordingly,
these unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated
financial statements thereto as of and for the years ended December 31, 2023.
Principles
of consolidation
The
unaudited interim condensed consolidated financial statements include the financial statements of the Company and its subsidiaries.
All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.
Subsidiaries
are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to
govern the financial and operating policies, to appoint or remove the majority of the members of the board of Directors, or to cast a
majority of votes at the meeting of Directors.
Non-controlling
interest represents the portion of the net assets of a subsidiary attributable to interests that are not owned by the Company. The non-controlling
interest is presented in the unaudited interim condensed consolidated balance sheets, separately from equity attributable to the
shareholders of the Company. Non-controlling interest’s operating result is presented on the face of the unaudited interim condensed
consolidated statements of income and comprehensive loss as an allocation of the total loss for the year between non-controlling
shareholders and the shareholders of the Company.
Use
of estimates and assumptions
The
preparation of unaudited interim condensed financial statements in conformity with U.S. GAAP requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and revenues and expenses during
the reporting periods. Significant accounting estimates reflected in the Company’s financial statements include, but not limited
to, estimates for useful lives of intangible assets, impairment of long-lived assets, deferred taxes and uncertain tax position, and
allowance for expected credit loss and revenue recognition. Changes in facts and circumstances may result in revised estimates. Actual
results could differ from those estimates, and as such, differences may be material to the unaudited interim condensed financial statements.
Risks
and uncertainties
The
main operations of the Company are in Singapore. Accordingly, the Company’s business, financial condition, and results of operations
may be influenced by political, economic, and legal environments in Singapore, as well as by the general state of the economy in Singapore.
The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in Singapore. The
Company believes that it is following existing laws and regulations including its organization and structure disclosed in Note 1, such
experience may not be indicative of future results.
The
Company’s business, financial condition and results of operations may also be negatively impacted by risks related to natural disasters,
extreme weather conditions, health epidemics and other catastrophic incidents, which could significantly disrupt the Company’s
operations.
Foreign
currency translation and transaction
The
accompanying unaudited interim condensed financial statements are presented in the Singapore Dollars (“SGD” or “S$”),
which is the reporting currency of the Company. The functional currency of the Company and its subsidiary in the British Virgin Islands
is United States Dollars (“USD” or “US$”), its other subsidiaries which are incorporated in Singapore and Malaysia
are SGD and Malaysia ringgit (“RM”), respectively, which are their respective local currencies based on the criteria of ASC
830, “Foreign Currency Matters”.
In
the unaudited interim condensed consolidated financial statements, the financial information of the Company and other entities
located outside of Singapore has been translated into SGD. Assets and liabilities are translated at the exchange rates on the balance
sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using
the average rate for the period.
The
following table outlines the currency exchange rates that were used in creating the unaudited interim condensed financial statements
in this report:
Schedule
of currency exchange rates
| | |
| June
30, 2023 | | |
| December
31, 2023 | | |
| June
30, 2024 | |
| Period-end spot rate | |
| SGD1.00 = RM3.4518 | | |
| SGD1.00 = RM3.4819 | | |
| SGD1.00 = RM3.4746 | |
| Average rate | |
| SGD1.00 = RM3.3382 | | |
| SGD1.00 = RM3.3932 | | |
| SGD1.00 = RM3.5035 | |
| | |
| | | |
| | | |
| | |
| Period-end spot rate | |
| SGD1.00 = USD0.7395 | | |
| SGD1.00 = USD0.7580 | | |
| SGD1.00 = USD0.7379 | |
| Average rate | |
| SGD1.00 = USD0.7484 | | |
| SGD1.00 = USD0.7447 | | |
| SGD1.00 = USD0.7431 | |
Convenience
translation
Translations
of balances in the unaudited interim condensed consolidated balance sheets, unaudited interim condensed consolidated statements of income,
unaudited interim condensed consolidated statements of changes in shareholders’ equity and unaudited interim condensed consolidated
statements of cash flows from SGD into USD as of June 30, 2024 are solely for the convenience of the readers and are calculated at the
rate of SGD1.00 = USD0.7379, representing the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on
June 28, 2024. No representation is made that the SGD amounts could have been, or could be, converted, realized or settled into USD at
such rate, or at any other rate.
Cash
and cash equivalents
Cash
and cash equivalents primarily consist of bank deposits with original maturities of three months or less, which are unrestricted as to
withdrawal and use. Cash and cash equivalents also consist of funds earned from the Company’s operating revenues which were held
at third party platform fund accounts which are unrestricted as to immediate use or withdrawal. The Company maintains most of its bank
accounts in Singapore and Malaysia.
Accounts
receivable and allowance for expected credit losses
Accounts
receivable include trade accounts due from customers. Accounts are considered overdue after 90 days. Management reviews its receivables
on a regular basis to determine if the allowance for expected credit loss is adequate and provides allowance when necessary. The allowance
is based on management’s best estimates of specific losses on individual customer exposures, as well as the historical trends of
collections. Account balances are charged off against the allowance after all means of collection have been exhausted and the likelihood
of collection is not probable. As of December 31, 2023 and June 30, 2024, the Company made S$9,802 and S$9,802 (US$7,233) allowance for
expected credit losses for accounts receivable, respectively.
Prepayments
Prepayments
are mainly payments made to vendors or services providers for future services that have not been provided and prepaid rent. These amounts
are refundable and bear no interest. Management reviews its prepayments on a regular basis to determine if the allowance is adequate
and adjusts the allowance when necessary. As of December 31, 2023 and June 30, 2024, no allowance was deemed necessary.
Deferred
IPO costs
Pursuant
to ASC 340-10-S99-1, IPO costs directly attributable to an offering of equity securities are deferred and would be charged against the
gross proceeds of the offering as a reduction of additional paid-in capital. These costs include legal fees related to the registration
drafting and counsel, consulting fees related to the registration preparation, the SEC filing and print related costs. As of December
31, 2022, the accumulated deferred IPO cost was S$676,321 (US$504,567). As of March 21, 2023 the Group successfully listed in the US
Nasdaq. Hence, these deferred IPO costs had charged against the gross proceeds of the offering as a reduction of additional paid-in capital.
The
Company has subsequently completed a follow-on public offering of 3,555,555 ordinary shares on February 16, 2024. As of December 31,
2023, the accumulated deferred costs related to the follow-on public offering were S$114,794 (US$87,012).
As
of June 30, 2024, the accumulated deferred costs related to public offering were S$0.
Deposits
Deposits
are mainly for rent, utilities and money deposited with certain vendors. These amounts are refundable and bear no interest. The short-term
deposits usually have a one-year term and are refundable upon contract termination. The long-term deposits are refunded from suppliers
when terms and conditions set forth in the agreements have been satisfied.
Other
current assets, net
Other
current assets, net, primarily consists of other receivables from third parties. These other receivables are unsecured and are reviewed
periodically to determine whether their carrying value has become impaired.
Property
and equipment, net
Property
and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated
useful lives of the assets. The estimated useful lives are as follows:
Schedule
of estimated useful lives
| |
|
Expected
useful lives |
| Leasehold
improvements |
|
lesser
of lease term or expected useful life |
| Office
furniture and fittings |
|
3-5
years |
| Office
equipment |
|
3-5
years |
| Computers |
|
3
years |
The
cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is
included in the unaudited interim condensed consolidated statements of operations and comprehensive loss. Expenditures for maintenance
and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life
of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances
warrant revised estimates of useful lives.
Business
combination
The
purchase price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired
business based on their estimated fair values, with the residual of the purchase price recorded as goodwill. Transaction costs associated
with business combinations are expensed as incurred and are included in general and administrative expenses in the Company’s consolidated
statements of operations. The results of operations of the acquired business are included in the Company’s operating results from
the date of acquisition.
Goodwill
Goodwill
represents the excess of the purchase price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed
of an acquired business. In accordance with ASC Topic 350, Goodwill and Other Intangible Assets (“ASC 350”), recorded goodwill
amounts are not amortized, but rather are tested for impairment annually or more frequently if there are indicators of impairment present.
In
accordance with ASC 350, the Company assigned and assessed goodwill for impairment at the reporting unit level. A reporting unit is an
operating segment or one level below the operating segment. As of December 31, 2023 and June 30, 2024, the Company as a whole is the
reporting unit of goodwill.
Pursuant
to ASC 350, the Company has an option to assess qualitative factors to determine whether it is more likely than not that the fair value
of a reporting unit is less than its carrying amount. In the qualitative assessment, the Group considers primary factors such as industry
and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations.
If the Group decides, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting unit
is less than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. The quantitative
impairment test consists of a comparison of the fair value based on discounted cash flow of each reporting unit with its carrying amount,
including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss equal to the difference will
be recorded. The impairment charge would be recorded in the consolidated statements of income and comprehensive income.
Application
of the goodwill impairment test requires judgment, including the determination of the fair value of each reporting unit. Estimating fair
value is performed by utilizing various valuation techniques, with a primary technique being a discounted cash flow which requires significant
judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth
for the Company’s business, estimation of the useful life over which cash flows will occur, and determination of the Company’s
weighted average cost of capital.
Intangible
Assets
Intangible
assets consist of software and capitalized research and development and customer relationship acquired from a business combination. Intangible
assets with finite lives are carried at cost less accumulated amortization and impairment loss, if any. Intangible assets with finite
lives are amortized using the straight-line method over the estimated useful lives.
Capitalized
Software and research and development
The
Company capitalizes certain eligible software development costs incurred in connection with its internal use software in accordance with
ASC 350-40, Internal-use Software and ASC 985, Software. These capitalized costs also relate to the Company’s development of a
proprietary software, HomerAI as well as a few ongoing development technology software. Capitalized software costs are amortized over
the estimated useful life of 5 years. Capitalization begins once the application development stage begins, management has authorized
and committed to funding the project, it is probable the project will be completed, and the software will be used to perform the function
intended. Internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready
for its intended use. The Company expenses all costs incurred that relate to planning and post-implementation phases of development.
Intangible assets are assessed for impairment when events or circumstances indicate the existence of a possible impairment, and none
were identified in the year ended December 31, 2023.
During
the year ended December 31, 2023, the Company capitalized S$0.9
million (US$0.7
million), and during the six months ended 30,
2024, the Company capitalized S$159,360
(US$117,592)
under ASC 350 included in intangible assets.
Intangible
assets that have determinable lives continue to be amortized over their estimated useful lives as follows:
Schedule
of estimated useful life
| Software and research and development | |
| 5
years | |
| Customer relationships | |
| 5
years | |
Impairment
for long-lived assets other than goodwill
Long-lived
assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions
that will impact the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable or that the
useful life is shorter than it was originally estimated. When these events occur, the Company, its wholly-owned subsidiaries evaluate
the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows
expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash
flows is less than the carrying value of the assets, an impairment loss is recognized based on the excess of the carrying value of the
assets over the fair value of the assets.
For
the years ended December 31, 2023 and the six months ended June 30, 2024, the Company, its wholly-owned subsidiaries, Ohmyhome BVI and
Ohmyhome BVI’s subsidiaries did not accrue impairment charge against intangible assets, including the customer relationship and
software and technology.
The
customer relationship arose from acquisition of Ohmyhome Property Management Pte. Ltd. by the Ohmyhome BVI in 2023.
For
the year ended December 31, 2023 and the six months ended June 30, 2024, the Company did not accrue impairment charge against software
and technology.
Fair
value measurement
The
accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and
requires disclosure of the fair value of financial instruments held by the Company.
The
accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance
disclosure requirements for fair value measures. The three levels are defined as follows:
| |
● |
Level
1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| |
● |
Level
2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that
are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. |
| |
● |
Level
3 inputs to the valuation methodology are unobservable and significant to the fair value. |
Financial
instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost,
which approximate fair value because of the short period of time between the origination of such instruments and their expected realization
and their current market rates of interest.
Stock-based
compensation
On
December 19, 2023, the Board of Directors adopted the 2023 Equity Incentive Plan (the “2023 Incentive Plan”). Stock-based
awards are measured at the grant date based on the fair value of the award and are recognized as expense, net of actual forfeitures,
on a straight-line basis over the requisite service period, which is generally the vesting period of the respective award. The Company
estimates the fair value of stock options using the Black-Scholes option pricing model. The determination of the grant date fair value
of stock awards issued is affected by a number of variables, including the fair value of the Company’s common stock, the expected
common stock price volatility over the expected life of the awards, the expected term of the stock option, risk-free interest rates,
the illiquidity of the option given its non-transferability, and the expected dividend yield of the Company’s common stock. The
Company derives its volatility from the average historical stock volatilities of the Company over a period equivalent to the expected
term of the awards. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of grant. The
expected dividend yield is 0.0% as the Company has not paid and does not currently anticipate paying dividends on its common stock.
Stock-based
compensation expense is classified in the accompanying consolidated statement of operations.
Revenue
recognition
Effective
January 1, 2020, the Company adopted ASC Topic 606, Revenue from Contracts with Customers, which replaced ASC Topic 605, using the modified
retrospective method of adoption. Results for reporting periods beginning after January 1, 2020 are presented under ASC Topic 606 while
prior period amounts are not adjusted and continue to be presented under the Company’s historic accounting under ASC Topic 605.
The Company’s accounting for revenue remains substantially unchanged. There were no cumulative effect adjustments for service contracts
in place prior to January 1, 2020. The effect from the adoption of ASC Topic 606 was not material to the Company’s unaudited interim
condensed consolidated financial statements.
The
five-step model defined by ASC Topic 606 requires the Company to:
(1)
identify its contracts with customers;
(2)
identify its performance obligations under those contracts;
(3)
determine the transaction prices of those contracts;
(4)
allocate the transaction prices to its performance obligations in those contracts; and
(5)
recognize revenue when each performance obligation under those contracts is satisfied. Revenue is recognized when promised services are
transferred to the client in an amount that reflects the consideration expected in exchange for those services.
The
Company enters into service agreements with its customers that outline the rights, responsibilities, and obligations of each party. The
agreements also identify the scope of services, service fees, and payment terms. Agreements are acknowledged and signed by both parties.
All the contracts have commercial substance, and it is probable that the Company will collect considerations from its customers for service
component.
The
Company has utilized the allowable practical expedient in the accounting guidance and elected not to capitalize costs related to obtaining
contracts with customers with durations of less than one year. We do not have significant remaining performance obligations.
The
Company derives its revenues from three sources: (1) revenue from brokerage services, (2) revenue from emerging and other related services,
and (3) revenue from estate management services and other related services.
The
Company earns brokerage services revenue from provision of brokerage and documentation services for buying, selling, and leasing and
renting properties. The Company recognizes commission-based brokerage revenue upon closing of a brokerage transaction and concurrently
issues invoice. The transaction price is generally calculated by taking the agreed upon commission rate and applying that to the home’s
selling price. Brokerage revenue primarily contains a single performance obligation that is satisfied upon the closing of a transaction,
at which point the entire transaction price is earned. We are not entitled to any commission until the performance obligation is satisfied
and are not owed any commission for unsuccessful transactions, even if services have been provided. The Company is considered to be the
principal agent as it has the right to determine the service price and to define the service performance obligations, it has control
over services provided and it is fully responsible for fulfilling the agency services pursuant to the housing agency service contracts
it signed with the housing customers. Accordingly, the Company accounts for the commissions from these agency service contracts on a
gross basis, with any commissions paid to other brokerage firms recorded as a cost of revenue. Typical payment terms set forth in the
invoice is within 30 days.
| |
2) |
Emerging
and other related services |
The
Company generates revenues from emerging and other services such as financial services and home renovation and furnishing services. Service
fees for emerging and other services are generally recognized as revenues when services are provided.
| |
3) |
Estate
management services and other related services |
Ohmyhome
Property Management Pte. Ltd. earns estate management services revenue from Management Corporate Strata Titles (MCSTs) by being appointed
as the Managing Agent for the respective estates to provide routine management, administration and secretarial services, accounting and
finance management, and the operation and maintenance of the estates. Management believes that the estate management services are integrated
services, and it is impractical to assess standalone value to each service; accordingly, the estate management services should be considered
as single performance obligation. In consideration of the services provided by the Company, the MCSTs pay a monthly fee to the Company.
The contract is a fixed contract with a fixed fee over the contractual period. The monthly management fee of individual estate varies
depending on the size of the estates and the scope of the services required. Estate management revenue primarily contains an ongoing
performance obligation that is satisfied upon the end of each calendar month, at which point the monthly fee is earned. The revenue is
recognized over time based on the fixed contract fee over the contractual period. The Company is considered to be the principal as it
has the right to determine the service price and to define the service performance obligations, it has control over services provided
and it is fully responsible for fulfilling the estate management services pursuant to the estate management service contracts it signed
with the MCSTs. Typical payment terms set forth in the invoice are within 30 days. The Company also generates revenues from other related
services such as providing of additional manpower which are usually in ad-hoc basis, certification of documents, disbursements, marketing
initiatives and others that to be completed in a short-term period. Service fees for other services are generally recognized at the point
in time when services are provided. Typical payment terms set forth in the invoice are within 30 days.
Contract
balances
Timing
of revenue recognition may differ from the timing of invoicing to customers. For certain services, customers are required to pay before
the services are delivered. The Company recognizes a contract asset or a contract liability in the unaudited interim condensed consolidated
balance sheets, depending on the relationship between the Group’s performance and the customer’s payment.
The
Company classifies its right to consideration in exchange for services transferred to a customer as either a receivable or a contract
asset. A receivable is a right to consideration that is unconditional as compared to a contract asset which is a right to consideration
that is conditional upon factors other than the passage of time. The Company recognizes accounts receivable in its unaudited condensed
consolidated balance sheets when it performs a service in advance of receiving consideration and if it has the unconditional right to
receive consideration. The Company did not have any capitalized contract cost as of December 31, 2023 and June 30, 2024.
Contract
liabilities are recognized if the Company receives consideration in advance of performance, which is mainly in relation to emerging and
other services. The Company expects to recognize a significant majority of this balance as revenue over the next 12 months, and the remainder
thereafter. As of December 31, 2023 and June 30, 2024, the contract liabilities of the Company amounted S$103,655 and S$90,271 (US$66,611),
respectively.
Cost
of revenue
Cost
of revenue consists primarily of personnel costs (including base pay and benefits), commission fee, property listing fee, referral fee
and subcontracting cost.
Advertising
expenditures
Advertising
expenditures are expensed as incurred and such expenses were minimal for the periods presented. Advertising expenditures have been included
as part of selling and marketing expenses. For the six months ended June 30, 2023 and 2024, the advertising expense amounted to S$378,507
and S$687,191 (US$507,777), respectively.
Technology
and development
Technology
and development expenses primarily include personnel costs (including base pay, bonuses, and benefits), platform development, and maintaining
and improving our website and mobile application development costs. We capitalize research and development personnel costs related to
the development of our new proprietary software products and features including HomerAI, MATCH, Digital Experience and others, as well
as acquired carrying value of the proprietary software from the acquisition of Simply Sakal. As of June 30, 2024, research and development
and software and technology, net amounted to S$1,213,661 (US$895,556) and is included in intangible assets. Other costs are expensed
off as incurred and record them in technology and development expenses.
Selling
and marketing expenses
Selling
and marketing expenses mainly consist of promotion and marketing expenses, media expenses for online and traditional advertising, as
well as labor costs. For the six months ended, 2023 and 2024, the Company’s selling and marketing expenses were S$848,504
and S$988,872
(US$729,687),
respectively.
Employee
compensation
Singapore
| |
(1) |
Defined
contribution plan |
The
Company participates in the national pension schemes as defined by the laws of Singapore’s jurisdictions in which it has operations.
Contributions to defined contribution pension schemes are recognized as an expense in the period in which the related service is performed.
| |
(2) |
Employees
leave entitlement |
Employee
entitlements to annual leave are recognized as a liability when they are accrued to the employees. The undiscounted liability for leave
expected to be settled wholly within the reporting period.
Malaysia
The
full-time employees of the Company are entitled to the government mandated defined contribution plan. The Company is required to accrue
and pay for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in
accordance with the relevant government regulations, and make cash contributions to the government mandated defined contribution plan.
Government
Grant
Government
grants as compensation for expenses already incurred or for the purpose of giving immediate financial support to the Company during the
COVID-19 pandemic. The government evaluates the Company’s eligibility for the grants on a consistent basis, and then makes the
payment. Therefore, there are no restrictions on the grants.
Government
grants are recognized when received and all the conditions for their receipt have been met and are recorded as part of Other Income.
The grants received were S$8,399 and S$45,418 (US$33,514) for the six months ended June 30, 2023 and 2024, respectively from the Singapore
Government.
Segment
reporting
ASC
280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent
with the Company’s internal organizational structure as well as information about geographical areas, business segments and major
customers in financial statements for detailing the Company’s business segments. The Company uses the “management approach”
in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s
Chief Operating Decision Maker (“CODM”) for making operating decisions and assessing performance as the source for determining
the Company’s reportable segments. Management, including the chief operating decision maker, reviews operation results by the revenue
of different products or services. Based on management’s assessment, the Company has determined that it has two operating segments,
which are (i) Brokerage, emerging and another related service; and (ii) Estate management services and other related services in Singapore.
All assets of the Company are located in Singapore and all revenue is generated in Singapore.
Information
reported internally for performance assessment as follows:
Six
months ended June 30, 2024
Schedule
of segment reporting information
| | |
Brokerage, emerging and another related
service | | |
Estate management services and other
related services | | |
Total | | |
Total | |
| | |
S$ | | |
S$ | | |
S$ | | |
US$ | |
| Revenue – external | |
| 2,479,416 | | |
| 1,983,553 | | |
| 4,462,969 | | |
| 3,293,218 | |
| Revenue – related parties | |
| 7,120 | | |
| - | | |
| 7,120 | | |
| 5,254 | |
| Total revenue | |
| 2,486,536 | | |
| 1,983,553 | | |
| 4,470,089 | | |
| 3,298,472 | |
| | |
| | | |
| | | |
| | | |
| | |
| Total cost of revenue | |
| (1,474,474 | ) | |
| (1,325,466 | ) | |
| (2,799,940 | ) | |
| (2,066,072 | ) |
| Gross profit | |
| 1,012,062 | | |
| 658,087 | | |
| 1,670,149 | | |
| 1,232,400 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating expenses | |
| (3,483,254 | ) | |
| (915,591 | ) | |
| (4,398,845 | ) | |
| (3,245,900 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Share-based compensation | |
| - | | |
| - | | |
| - | | |
| - | |
| Interest income | |
| 130,072 | | |
| 6,607 | | |
| 136,679 | | |
| 100,855 | |
| Interest expense | |
| (14,904 | ) | |
| - | | |
| (14,904 | ) | |
| (10,998 | ) |
| Government grants | |
| 45,668 | | |
| (250 | ) | |
| 45,418 | | |
| 33,514 | |
| Foreign exchange gain | |
| 266,616 | | |
| - | | |
| 266,616 | | |
| 196,736 | |
| Other income, net | |
| 15,150 | | |
| 352 | | |
| 15,502 | | |
| 11,439 | |
| Segment loss | |
| (2,028,590 | ) | |
| (250,795 | ) | |
| (2,279,385 | ) | |
| (1,681,954 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Total assets | |
| 11,916,421 | | |
| 829,759 | | |
| 12,746,180 | | |
| 9,405,386 | |
| Total liabilities | |
| 5,001,094 | | |
| 863,115 | | |
| 5,864,209 | | |
| 4,327,192 | |
| Net assets | |
| 6,915,327 | | |
| (33,356 | ) | |
| 6,881,971 | | |
| 5,078,194 | |
There
was only one segment which is the brokerage, emerging and other related services segment as of June 30, 2023.
Leases
The
Company adopted ASC 842 on January 1, 2019. The Company determines if an arrangement is a lease at inception. Operating leases are included
in operating lease right-of-use (“ROU”) assets, operating lease liability, and operating lease liability, non-current in
the Company’s unaudited interim condensed consolidated balance sheets. ROU assets represent the Company’s right to use an
underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from
the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments
over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably
certain that it will exercise that option, if any. As the Company’s leases do not provide an implicit rate, the Company used an
incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
The Company has elected to adopt the following lease policies in conjunction with the adoption of ASU 2016-02: (i) for leases that have
lease terms of 12 months or less and does not include a purchase option that is reasonably certain to exercise, the Company elected not
to apply ASC 842 recognition requirements; and (ii) the Company elected to apply the package of practical expedients for existing arrangements
entered into prior to January 1, 2019 to not reassess (a) whether an arrangement is or contains a lease, (b) the lease classification
applied to existing leases, and(c) initial direct costs.
Income
taxes
The
Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for
the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted
or substantively enacted by the balance sheet date.
Deferred
taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the
carrying amount of assets and liabilities in the unaudited interim condensed consolidated financial statements and the corresponding
tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary
differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which
deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period
when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is
related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets
are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.
An
uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained
in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that
is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test,
no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax for the six months ended June 30,
2023 and 2024. The Company had no uncertain tax positions for the six months ended June 30, 2023 and 2024. The Company does not expect
that its assessment regarding unrecognized tax positions will materially change over the next 12 months.
Comprehensive
loss
Comprehensive
loss consists of two components, net loss and other comprehensive loss. Other comprehensive loss refers to revenues, expenses, gains
and losses that under GAAP are recorded as an element of shareholders’ equity but are excluded from net loss. Other comprehensive
loss consists of a foreign currency translation adjustment resulting from the Company not using the United States dollar as its functional
currencies.
Loss
per share
The
Company computes loss per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies
to present basic and diluted EPS. Basic EPS is measured as net loss divided by the weighted average ordinary share outstanding for the
period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (e.g., convertible securities,
options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential
ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded
from the calculation of diluted EPS. For the six months ended June 30, 2023, there were no dilutive shares. For the six months ended
June 30, 2024, the total diluted ordinary share was 23,262,574 as compared to the basic number of ordinary share issued at 19,221,384
as of December 31, 2023.
Related
party transactions
Parties,
which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control
the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also
considered to be related if they are subject to common control or common significant influence, such as a family member or relative,
shareholder, or a related corporation.
Commitments
and Contingencies
In
the normal course of business, the Company is subject to contingencies, including legal proceedings and claims arising out of the business
that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such
contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Company may
consider many factors in making these assessments including historical and the specific facts and circumstances of each matter.
Concentration
of Risks
Concentration
of credit risk
Financial
instruments that potentially expose us to concentrations of credit risk consist primarily of cash and cash equivalents and account receivable.
The Company place our cash and cash equivalents with financial institutions with high credit ratings and quality.
Accounts
receivable primarily comprise of amounts receivable from the service customers. The Company conducts credit evaluations of customers,
and generally does not require collateral or other security from our customers. The Company establish an allowance for doubtful accounts
primarily based upon the factors surrounding the credit risk of specific customers.
Concentration
of customers
As
of June 30, 2024, no customer accounted for 10%
of the account receivables. As of December 31, 2023, two customers, one is a provider of general insurance and another is a property
consultancy firm, accounted for 10.0%
and 25.85%
of the account receivables respectively.
Concentration
of vendors
For
the six months ended June 30, 2024, no vendor accounted for more than 10% of total purchases.
For
the year ended December 31, 2023, no vendor accounted for more than 10% of total purchases.
Recently
issued accounting pronouncements
The
Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material
effect on the Company’s unaudited interim condensed consolidated balance sheets, unaudited interim condensed consolidated statements
of operations and comprehensive loss and unaudited interim condensed consolidated statements of cash flows.
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